Savings accounts (even with interest) don’t count as good investments
In Mauritius, most people turn to two main types of bank accounts for their money:
Basic savings accounts, paying roughly 3% per year (maybe a bit more for big balances or seniors).
Fixed-term deposits, where you lock your cash away for years under strict rules. These have historically generated around 4-6% per year but today they generate around 3.2-4.1%.
Both options feel safe and steady, but they're not great investing tools.
Basic savings at 3% can't keep up with Mauritius inflation
True investing starts with protecting your purchasing power against inflation. Here's the reality about inflation in Mauritius over the past decade:
1.3% in 2015
1.0% in 2016
3.7% in 2017
3.2% in 2018
0.5% in 2019
2.5% in 2020
4.0% in 2021
10.8% in 2022
7.0% in 2023
3.6% in 2024
At a flat 3%, your money loses ground most years (especially during spikes like 2022-2023). Over time, basic savings accounts simply don't grow wealth or even reliably hold the value of your money.
Fixed-term deposits are better, but still not enough
Fixed-term products beat basic savings and can sometimes protect against inflation if you lock in during lower-inflation periods. But they're defensive at best. You're not tapping into real economic growth like stocks, property, or funds do. You're just earning a fixed rate while (behind the scenes) the bank truly uses your money for their own benefit.
A 10-year reality check
We saw that living costs rose steadily over the past 10 years. When we plug the inflation rate into an equation that gives us a cumulative rate from 2015-2024, we get 44%. This means that whatever you would buy with Rs 100,000 in 2015 would cost you roughly Rs 144,000 in 2024. So you would need Rs 144,000 just to stay even...
Now, imagine that you put Rs 100,000 in different places at the beginning of 2015 and checked it at the end of 2024. Here’s how the options compare:
| Strategy |
What you have in 2024 (Rs)
|
Equivalent in 2015 (Rs)
|
Outcome
|
|---|---|---|---|
|
Do nothing (just hold cash)
|
100,000
|
~69,400
|
Your Rs 100,000 in 2024 buys only what Rs 69,400 bought in 2015.
You lose ~31% of buying power. |
|
Basic savings (~3% per year)
|
~134,400
|
~93,300
|
Your Rs 134,400 in 2024 buys only what Rs 93,300 bought in 2015.
You lose ~7% of buying power. |
|
Fixed-term (~5% average)
|
~162,900
|
~113,100
|
Your Rs 162,900 in 2024 buys what Rs 113,100 bought in 2015. It's a small win.
You gain ~13% of buying power. |
Pou résumé
Basic savings slowly but surely destroy your wealth. Fixed-term deposits might protect your wealth (or give you a small real return). However, at today's low rates, fixed-term deposits barely tread water and they miss out on the bigger rewards that actual investing has to offer. Also, if inflation heats up again or rates stay low… even fixed deposits fall short.